Funding for Attorney s and Law offices1893189

For a court that practices contingent litigation managing cashflow is vitally important. Sadly managing ones income is an afterthought for many trial lawyers. Cash flow is very sporadic as they only get paid when cases are successfully concluded. With lots of cases taking years to bring to conclusion projecting ones cash flow can be a daunting task.

Contingent firms typically advance all the cost of litigation upfront in substitution for a percentage with the recovery. In a contingent case a firm may invest countless attorney hours and hundreds and hundreds of dollars right into a case. If your firm loses an instance it loses not just its time nevertheless the cash dedicated to hard costs too. It becomes worse, a firm is not allowed to deduct the amount of money they have tangled up is case costs. Not only do they have to fund the amount of money up front but they have to fund it with after tax dollars. Chances are they repeat the cycle and plow the fees from successful cases in to the next number of cases.

The missing ingredient in improving income for most contingent lawyers is something most businesses have already been utilizing for years. Leverage. Most lawyers have funded costs with your own money since they started, only because that's how it has always been done.

A revolving personal credit line can be one of the main tools in the plaintiff lawyers fight for justice. By using borrowed money to finance litigation expenses a strong can eliminate the negative tax consequences of self funding. The firm actually realizes the income it is receiving in fees. Any interest a company pays may be offset insurance firms the money which was tied up just in case costs designed for firm expansion or outside investments. Nevertheless the biggest advantage is not using after tax dollars to invest in case development expenses.

We're in a time where trial law offices have more options than ever when it comes to financing their practice, from traditional banks and specialty financial institutions to legal finance consultants. Contingent lawyers can and must pay attention to the main point here if they need to continue helping their customers.